May 25, 2010

Soy futures in CBOT dropped Monday (May 24) as this week's soy export inspection has fallen to the lowest level since September last year.

Wheat fell as dollar strengthened, and corn rose for the fourth session in five on speculation that China may need more corn supplies from the US.

Soy futures for July delivery went down to settle at US$9.405 per bushel. July corn climbed US$0.02 to US$3.71. July wheat dropped US$0.045 to US$4.675 a bushel.

The speculation that China would bolster demand for US grain has once again driven up the corn price, despite the surge in dollar and a generally favourable weather forecast for this week and possibly into next week. USDA said that this week's corn export inspections were 39.9 million bushels, one million bushels higher than last week, which has also lifted corn price.

The sharp rally in dollar has weighed on wheat by reducing its attractiveness in the global market, despite the fact that this week's wheat export inspection reached 20.3 million bushels, an increase of 56% from last week.

The warmer and drier weather for most of the US winter belt this week is considered quite helpful for crop development, thus putting much pressure on wheat, since there were excessive rainfalls earlier this spring in the soft red wheat belt which may cause disease and quality problems.

Soy posted strong gains to start the session, with the price touching US$9.525 per bushel earlier in the session, the highest since May 17. It then gradually gave back all its gains, pressured by a strong dollar and an 8-month-low export inspection.

This week's soy export inspections were only 3.9 million bushels, which is the lowest inspection total for soy since the week of Sept. 17, compared with 8.973 million bushels last week, according to USDA.